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AIBEA’s Banking News 3 MAY 2018 NEWS BULLETIN FROM ALL INDIA BANK EMPLOYEES’ ASSOCIATION ‘Struggle for a living wage continues’ BY NOMAZIMA NKOSI AND ODETTE PARFITT - 02 May 2018 HERALDLIFE President Cyril Ramaphosa arrives at the Wolfson Stadium Arriving to a hero‘s welcome at Port Elizabeth‘s Isaac Wolfson Stadium yesterday, President Cyril Ramaphosa hailed the new national minimum wage as a historic victory for workers. He was addressing a sea of red-clad Cosatu members and supporters who had packed the 10 000-seat Kwazakhele stadium to celebrate National Workers‘ Day. ―This is a victory no matter what other people may say,‖ Ramaphosa said. 1 ―We knew R20 an hour was not a living wage, but we needed to form a foundation. ―If we said workers had to earn R15 000, many people would lose their jobs and companies would [have to] close. ―We concluded that the struggle for a living wage must continue but we must start somewhere. ―This is a struggle that you as workers must wage.‖ Ramaphosa credited Cosatu for the start of minimum wage negotiations, saying the labour federation had identified the need as enshrined in the Freedom Charter. He also called for equal pay for men and women workers, and said while the government wanted to protect workers‘ right to strike, they should do so responsibly. ―We must look very carefully at how we engage in our industrial action. ―Recently, we‘ve found some workers have prevented others from doing important work, such as helping women give birth. ―Let us have that humanity that, even when we are on strike, certain services are important. ―We need to say, even as we strike, let us protect the vulnerable.‖ He praised workers for their contribution to the country. ―[This] is your day. It belongs to you whether [others] like it or not.‖ SACP general secretary Blade Nzimande urged workers to stand up against things that threaten the country, including issues like state capture. 2 ―You fought to liberate South Africa, you cannot stand by while this happens – unless workers take responsibility for their country we‘ll be in trouble.‖ Cosatu president Sdumo Dlamini said he wanted a total ban on labour brokers. ―We demand that this year the existence of labour brokers must be declared a criminal activity punishable by the law at the same level as an exercise of slavery. ―Labour brokers must be banned now – if not, we will be forced to [take to] the streets,‖ he said. Turning his attention to Nelson Mandela Bay, Dlamini said Bay mayor Athol Trollip and the DA‘s days in office were numbered as the Eastern Cape was an ANC-run province. ―This is the beginning of our programme [to remove the DA] and we‘re going to come into this municipality and force you out,‖ he said. South African National Civic Organisation president Richard Mdakane encouraged Cosatu members to band together where workers‘ rights were concerned. ―We need to work together because workers‘ struggles are not separate from community struggles,‖ Mdakane said. Earlier in the day, Cosatu, led by Eastern Cape provincial secretary Xolani Malamela, handed over a memorandum to the Bay municipality, urging the administration to stop purging black municipal employees, allegedly over political affiliations. He said the municipality should stop harassing municipal workers, particularly in the Waste Management Department, adding that it needed to prioritise the northern areas. 3 The memorandum was received by Labour Department official Zonile Ndoni and municipal official Andile Makapela. Workers at the rally said they had made sacrifices to support the fight for workers‘ rights. Linda Madolo, a domestic worker from Zwide, said she had to get up early to take a taxi to the rally. ―My employer is deducting my pay for [the day], but it is worth it,‖ she said. ―I think the president can help with some, but not all, of our problems [as domestic workers].‖ Lungisa Ndubela said she had come to the rally to celebrate May Day, but also to fight for better wages. Another worker, a cleaner at Nelson Mandela University, who asked not to be named, said she wanted to know more about her rights. ―We still work under discrimination,‖ she said. – Additional reporting by TimesLIVE Government to encourage whistle- blowers to report corporate frauds Union Minister P P Chaudhary has said that the government plans to encourage whistle-blowers to inform it about suspicious activities at corporates and is working to link Aadhaar details of 4 stakeholders with filings made under the companies law. As per reports, embarking on multi-pronged efforts to clamp down on illicit fund flows, the corporate affairs ministry has already struck off the names of 2.26 lakh companies from the official records for not carrying out business activities for long besides ordering probes into the affairs of many such entities. Commenting on the issue, Union Minister P P Chaudhary told the media, "We would also encourage the whistle-blowers to come forward to inform the government, concerned authorities about any suspected activities, if they come to know about any such wrong things." The Minister of State for Corporate Affairs said linking of Aadhaar details with company filings would help ascertain the authenticity of the individuals concerned. "The ministry aims to tackle the issue of bogus identities in filings of the companies at the MCA 21 portal and the step to link Aadhaar details is proposed to be taken to deal with the "menace of shell companies, suspected to be used for laundering illicit funds", he said. High NPA ratio proves PSBs did not make enough provisions: RBI NPAs in banks Deterioration in asset quality higher than that of private banks 5 MUMBAI, MAY 2 BUSINESSLINE Public sector banks did not make enough provisions as seen from their high net non-performing asset (NPA) ratio of 6.9 per cent (against 2.2 per cent and 0.6 per cent for private sector and foreign banks, respectively) at the end of March 2017, according to a Reserve Bank of India occasional paper. The median individual bank-wise data suggests that the deterioration in asset quality of public sector banks was much more pronounced vis-à-vis private sector banks or foreign banks, said the paper, ‗Asset Quality and Monetary Transmission in India‘. The gross NPA ratio of public sector banks increased from 3.8 per cent at March-end 2013 to 5.4 per cent at March-end 2015 and further to 12.5 per cent at March-end 2017, while that of private sector banks increased from 1.9 per cent to 2.2 per cent to 3.5 per cent over the same period. ―Banks increased their provision coverage ratio (PCR) – from 40.3 per cent at March-end 2014 to 41.9 per cent in March 2016 and further to 43.5 per cent at March-end 2017; this, however, fell short of the objective to have ―clean and fully-provisioned bank balance sheets by March 2017‖ (Rajan, 2016)‖, said the paper. With provisions and contingencies increasing by 45.2 per cent at the end of 2015-16 (₹2,09,400 crore), net profits shrank by 61.7 per cent. Provisions and contingencies increased further by ₹2,43,700 crore at the end of 2016-17, reflecting the continued stress in asset quality, said the authors. 6 The authors elaborated that net NPAs increased to ₹4,33,100 crore (5.3 per cent of net advances) at the end of 2016-17 from ₹3,49,800 crore (4.4 per cent of net advances) a year earlier, reflecting the requirement for further provisioning in the years to come. The RBI paper observed that a healthy bank with low default risk in its loan portfolio will be able to pass on interest rate changes of the central bank symmetrically on its deposits and loans. On the other hand, a bank faced with a high level of NPAs – prospective or realised – will seek to build up provisions by loading credit risk premia on its performing loans, thereby pushing up the lending rates and, hence, its net interest margin (NIM). ―In the process, notwithstanding lower funding costs in response to the policy rate cut by the central bank and comfortable liquidity conditions, banks may not reduce their lending rates or may reduce them only partly, thereby impeding monetary transmission. ―Thus, movements in the NIM of banks, among others, could provide an important indication of the effectiveness of monetary transmission.‖ No proposal to hike FDI limit in state- run banks: Eco Secy At present, 20 percent foreign investment is permitted in PSU banks under government approval route. However, the same is 74 percent for private sector banks provided there is no change of control and management of the investee company. 7 PTI@moneycontrolcom Putting to rest speculations on raising FDI limit in public sector banks, Economic Affairs Secretary Subhash Chandra Garg said there is no such proposal and also ruled out their privatisation. "There is no such proposal for relaxing FDI limit (in public sector banks)," Garg said. At present, 20 percent foreign investment is permitted in PSU banks under government approval route. However, the same is 74 percent for private sector banks provided there is no change of control and management of the investee company. When asked if the government is considering any proposal for privatising state-owned banks, Garg said: "I don't think there is any proposal for privatisation of any bank." According to experts, increase in foreign investment would result in flow of capital which PSU banks require urgently. The government can provide limited support to these banks as the resources are limited.